American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Communities, Co-ops, and Clubs: Social Capital and Incentives in Large Collective Organizations
American Economic Journal: Microeconomics
vol. 13,
no. 3, August 2021
(pp. 29–69)
Abstract
We study a continuous-time organization design problem. Each member's output is an imperfect signal of his underlying effort, and each member's utility from remaining in the organization is endogenous to other members' efforts. Monetary transfers are assumed infeasible. Incentives can be provided only through two channels: expulsion following poor performance and respite following good performance. We derive the steady state distribution of members' continuation utilities for arbitrary values of the initial and maximum continuation utilities and then optimize these values according to organizational objectives. An optimally designed organization can be implemented by associating continuation utilities with a performance-tracking reputation system.Citation
Jacobs, Joshua A., Aaron M. Kolb, and Curtis R. Taylor. 2021. "Communities, Co-ops, and Clubs: Social Capital and Incentives in Large Collective Organizations." American Economic Journal: Microeconomics, 13 (3): 29–69. DOI: 10.1257/mic.20180359Additional Materials
JEL Classification
- D23 Organizational Behavior; Transaction Costs; Property Rights
- D82 Asymmetric and Private Information; Mechanism Design
- D86 Economics of Contract: Theory
- P13 Cooperative Enterprises
- Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
There are no comments for this article.
Login to Comment